Mixed Outlook for Hiring and Salaries

By David Butcher

June 27, 2007

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Once again, the forecast for the labor market appears mixed. Herein are the latest figures on hiring expectations in manufacturing and service sectors, the outlook for salaries and incomes, and a breakdown of annual compensation of supply management professionals.

According to The Conference Board's latest Consumer Confidence Index, released this week, 14 percent of the 5,000 United States households surveyed expect more jobs in the months ahead, edging up over 13.6 percent in May. However, those anticipating fewer jobs also increased to 17.0 percent this month from May's 15.6 percent.

Consumers' attitudes about business conditions for the next six months became more polarized with those anticipating improvement rising to 16.1 percent from 15.3 percent and those who expect worsening rising to 11.0 percent from 10.2 percent.

When it comes to income and salary expectations, The Conference Board found that the proportion of consumers expecting their incomes to increase in the months ahead remained relatively unchanged at 18.7 percent.

The supply management institute surveyed supply management professionals in the U.S. during January and February 2007 and gathered information on salary, bonuses and stock options from 1,155 respondents. ISM examined through multiple breakdowns, including job title, years of experience, education level, certification status and buying responsibility.

For companies whose gross revenue is lower than $500 million, their supply management professionals make an average of $75,480 or less, according to ISM. For the companies whose gross revenue falls within the range of $500.1 million to $10 billion, ISM data reveal that supply managers make an average of $90,116 to $93,892. Finally, supply management professionals working for companies with more than $10 billion in revenue bring home approximately $103,486.

ISM further established average salaries (for the 2006 calendar year) for the following specific job titles:

Bonuses, included in the salary figures, were earned by 61.7 percent of all respondents. On average, bonuses received were $16,118, which was representative of 13.5 percent of total gross salary received. (The highest bonus reported was $154,000.)

ISM's Employment Index registered 51.9 percent in May (the most recent data available), which is a decrease of 1.2 percentage points when compared to April's reading of 53.1 percent. An Employment Index above 49.2 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics data on manufacturing employment.